Category: Donor Participation Project

Social impact bonds (SIBs) present an innovative funding model for nonprofits, but they also bring potential risks and challenges. Nonprofits interested in SIBs must focus on three key areas to address these risks: sustainability, costs, and evaluation.

SIBs are often designed to achieve long-term social outcomes, so the programs they fund must be sustainable beyond the life of the bond. This may require securing additional funding, developing a scalable model, and ensuring the program becomes embedded in public sector work. For example, a program that trains refugees as nurse assistants could tap into grants for workforce development and partner with healthcare organizations to provide ongoing jobs.

SIBs can be expensive to set up and manage, including costs for negotiating contracts, service delivery, measuring outcomes, and conducting impact evaluations. Nonprofits must account for these costs in their financial models and ensure potential returns justify them. They may need to charge higher fees to investors or secure separate funding to cover additional costs.

Robust data collection and analysis are required to determine if SIBs achieve their intended impacts and trigger investor payments. Nonprofits must have strong evaluation systems in place, or work with third-party evaluators. They need to establish concrete outcomes and metrics at the outset, and collect and analyze data to demonstrate results to investors and public sector partners.

By addressing these three risks proactively, nonprofits can increase their likelihood of securing SIB funding, achieve sustainable impacts, and provide financial returns to investors. With the proper safeguards and evaluation strategies in place, nonprofits of all sizes can utilize SIBs to fund innovative programs and drive meaningful change. Overall, SIBs present an opportunity for nonprofits to focus on outcomes rather than fundraising, but only if they go in with their eyes open to the potential challenges. With careful planning, SIBs can be a useful tool for social change.

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For fundraising shops looking to grow, Delhousie University offers an inspiring case study. Over the course of 10 years, Delhousie tripled its advancement team, budget, and fundraising results. Peter Ferrari, who led the advancement team during this growth, shared how they achieved this in a recent podcast.

The first step was determining how advancement was actually performing. Ferrari analyzed 20 years of fundraising data to understand Delhousie’s historical growth and return on investment. Despite variability from year to year, he found that over the long run, Delhousie secured about $6 in new donations for every $1 spent on fundraising.

Next, Ferrari benchmarked Delhousie against other universities to see how their performance and resources compared. He found Delhousie was average in some areas but underinvested in fundraising relative to competitors. This data gave Ferrari confidence that with more resources, Delhousie could raise significantly more.

Ferrari then projected how much Delhousie could raise with higher investment, building a case for support with multi-year growth plans. The key, Ferrari argues, was grounding these projections in facts. By demonstrating a track record of success and relative underperformance, Ferrari convinced leadership to triple Delhousie’s advancement budget.

With more resources, the advancement team grew and invested in staff, technology, and outreach. Donations skyrocketed as a result. After the first five years, the new budget had generated over $70 million in new donations—far surpassing the initial investment.

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For years, higher education institutions have relied on phonathons to raise critical unrestricted dollars from alumni. However, experts argue it’s time for schools to rethink the phonathon model to build meaningful engagement and lifetime donor loyalty.

Perry Willett, founder of Principal Volanthropy, says phonathons are often solely focused on dollar goals and housed within annual giving departments. But they could serve a much broader purpose. “Donors have been saying for decades, ‘I only hear from you when you want my money.’ They want to help in other ways. We have ignored them and not created systems to allow them to do that,” Willett says.

If schools repositioned phonathons to focus not just on giving but on volunteerism, events, mentoring and more, they could tap into donors’ full potential to contribute. This could strengthen the institution-donor relationship and open up more impactful opportunities for donors to get involved.

Dr. Sholanda Martin agrees that schools need to take a wider engagement perspective. “We’re partnering much more intensely with other campus partners because we can see the interrelation between all of the functions that we do. And what we do doesn’t just financially support what other people do, but it also reputationally does too,” she says.

By integrating phonathons into a broader engagement strategy, schools can build a pipeline for deeper donor participation over a lifetime. They can also make the experience more meaningful and equitable for diverse groups of alumni. The key is having resources and institutional support to make this shift.

While fundraising metrics and dollars raised still matter, donors matter more. Repositioning the phonathon around engagement and participation instead of strictly dollars can help schools develop lifelong advocates and build a culture of philanthropy to support them for generations to come. The time for this broader, more strategic approach to fundraising is now.

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A recent survey by the Donor Participation Project found that advancement leaders need help demonstrating the return on investment of donor participation efforts to higher administration. How can fundraisers build a compelling case for these broad-based fundraising programs?

Start by quantifying the long-term value of today’s donors. For example, compare the number of recent graduates who make a gift within five years of graduating to the number who become high-level donors in 10-15 years. Use predictive modeling to estimate the lifetime value of these entry-level donors and the potential major gifts in the pipeline. While the ROI of donor participation efforts may be harder to prove than major gifts, show how they build the foundation for future fundraising success.  

Focus on engaging new donors, not just chasing participation rates. Measure success through metrics like donor retention and upgrading over time instead of focusing narrowly on the number of gifts each year. Demonstrate how enhanced engagement—through digital campaigns, customized communications, and in-person events—leads to higher lifetime value and major gift potential.  

Educate leadership about modern fundraising strategies. Explain how tactics like social media marketing, online giving days, and data-driven appeals are necessary to reach today’s donors. Discuss how other departments on campus, like admissions or student affairs, have adapted to engage their audiences, and how advancement needs to keep up. Ask for the resources and organizational support required to build a robust digital and analytics program.

Make the case that a long-term, campus-wide fundraising strategy requires investment in both infrastructure and innovation. While donor participation efforts may be less glamorous than principal gifts, they establish the foundation for a healthy, sustainable development program. With the right data, messaging, and vision, fundraisers can convince their leadership of the vital role that broad-based fundraising plays in the overall success and financial health of the institution. Overall, taking the time to articulate their vision, strategies, and needs can help fundraisers gain the support required to grow donor participation and build the pipeline of the future.

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Nonprofit organizations often struggle with the challenge of attracting and retaining qualified fundraising staff. As discussed by experts in a recent podcast, the nonprofit sector needs to strengthen its “talent pipeline” by investing in training programs and career pathways for development professionals.

With demand far outpacing supply, nonprofits must compete for experienced fundraisers. At the same time, they need to bring on junior staff and help them develop expertise. This requires offering competitive pay and benefits, as well as opportunities for mentorship and professional growth. 

Mid-level staff, in particular, need support to progress in their careers. Nonprofits should create clear job tracks with titles and salary bands that allow fundraisers to advance from manager to senior manager to director and beyond. They must also budget for ongoing learning and skills development. This could include programs for obtaining CFRE certification, as well as memberships to industry organizations.

For new college graduates and career-changers, nonprofit internship and fellowship programs are key. Organizations should collaborate with universities to provide field experience for students and new professionals. While interns require supervision, they also bring enthusiasm and help build the talent pipeline.

To improve the fundraising profession overall, nonprofits must advocate for more formal training programs. A master’s degree in nonprofit management, for example, should include coursework in development and donor relations. Continuing education programs are also needed for mid-career professionals. 

By investing in people, nonprofits can equip themselves with the talent and skills required to boost donor participation rates over the long run. With a coordinated effort across organizations, the nonprofit sector can strengthen its professional pipeline and better achieve its mission. Overall, nonprofit fundraising success starts with the education, experience, and expertise of development staff.

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Artificial intelligence and chatbots are transforming how nonprofits engage with donors and supporters. While the technology seems complex, nonprofit fundraisers can easily build their own AI chatbots to boost donor participation and fundraising.

One way to build a chatbot is by using an automation platform like Zapier and its “Create a Chatbot” feature. You first determine the purpose of your chatbot, such as acting as a fundraising coach. Then you create an introductory greeting for donors and the first prompt to get the conversation started. 

The key step is providing directives to guide the chatbot’s knowledge and responses.

For a fundraising coach chatbot, directives would include advice and principles around donor engagement and participation. For example, “Engagement leads to philanthropy, not the other way around. Make donors feel valued and seen because that improves their retention and investment.” With these types of directives, the chatbot can have insightful conversations about challenges like reactivating lapsed donors or overcoming board resistance to sharing prospects.

To improve the chatbot, continue adding more specific directives and examples relevant to your nonprofit’s mission and donors. You can also “train” the chatbot by providing examples of real conversations to help it learn proper responses.  Include an “Easter egg” in the directives, mentioning your organization or programs. This helps to promote your cause even through an automated chat.

While chatbots cannot replicate human relationships, they can start meaningful conversations with donors and provide on-demand support for fundraisers. Building your own customized chatbot is a creative way to demonstrate how your nonprofit is using technology and innovation to better achieve its mission. With some experimentation, nonprofits can develop useful and personalized chatbots to assist with fundraising.

In summary, chatbots and AI are more accessible than you may think. Nonprofits can easily build their own tools to supplement fundraising and donor engagement. All you need is an understanding of your donors, some automation, and a willingness to experiment. The technology may be advanced but deploying it for good is within your reach.

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If you want to build a robust donor base with high retention rates, focus on engaging students and recent graduates. Creating a culture of philanthropy early on establishes a habit of giving that lasts long after graduation.  

Matthew Lambert, Vice President for University Advancement at William & Mary, credits establishing a student philanthropy program 10 years ago with doubling William & Mary’s donor base. The program educates freshmen about the importance of philanthropy and long-term engagement. By positioning annual giving and alumni relations as equal partners, not subordinates, William & Mary built an integrated approach to fundraising.

The key to the program’s success was leadership support. William & Mary’s presidents advocated for an engaged philanthropy model, allowing the advancement team to experiment. “Take risks, try new things, and if we fail, learn quickly and move on,” Lambert advises. Early wins with student more resolute donors over the long run.

For Dan Frezza, Chief Advancement Officer at College of Charleston, the lesson that engagement drives philanthropy came from his time in student affairs. He created a student philanthropy model at Abilene Christian University, recognizing that if students graduate with a habit of giving, they continue as alumni. At College of Charleston, Frezza is focused on building an intentional culture of philanthropy, not transactional giving.  

Fundraisers seeking to build donor retention should make student and young alumni programs a strategic priority. Begin with education, create opportunities for students and new grads to make a gift of any size, then steward those donors well with gratitude and impact. The more people experience the power of philanthropy early on, the more likely they are to continue giving over a lifetime. With leadership support, start experimenting, take risks and measure results—the investment in new donors will pay off for years to come.

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Virtual and gaming fundraising are emerging areas that nonprofits should explore to engage younger donors and future supporters. According to Lewis Diaz, executive director of annual giving at Milenberg College, “gaming and esports fundraising are generating a lot of interest.” Some higher education institutions are even starting esports teams, showing the potential for fundraising in this space.

However, to succeed with innovative fundraising strategies like these, nonprofits must first cultivate deep community engagement and make donor participation a priority. Diaz recommends focusing on participatory, purposeful, recurring events that identify and develop leadership to build this engagement. For example, interactive livestreamed fundraising events can leverage tools like chat functions to involve attendees. Monthly giving programs, which convert single donors into long-term supporters, are also key to success.

With the right foundation of a loyal donor base and recurring revenue established, nonprofits can experiment with gaming and virtual events. Livestreaming platforms offer creative possibilities for interactive experiences beyond traditional charity drives or telethons. Diaz suggests, “an improved telethon for streaming with more interactivity” as a model for innovative virtual fundraising. Esports tournaments are another option, especially for nonprofits with younger target audiences.

Some risks to consider include lack of experience in new technologies, uncertain return on investment, and pushback from traditional donors. However, the rewards of pioneering creative fundraising strategies, especially to engage future generations of supporters, are well worth the effort for many nonprofits. With openness to experimentation and reliance on data to determine what works, gaming and virtual fundraising have the potential to drive real impact.

As donors increasingly operate in digital spaces, nonprofits must meet them there. Gaming and virtual fundraising are just beginning, but represent the cutting edge of how we build and engage community in the 21st century. By cultivating authentic and reciprocal relationships in both physical and virtual realms, nonprofits will secure relevance for generations to come. The future of fundraising has arrived.

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For nonprofits seeking sustainable donor growth, monthly giving programs are essential. Monthly donors have significantly higher retention rates, often over 90%, ensuring steady revenue. Nicole Stern, a public media membership director, shared insights into launching a successful monthly giving program.

The key is positioning monthly giving as your primary donation option, not an add-on.

Stern says, “It’s not just slapping on an option on a form or creating a new giving society…it has to be positioned as the main option.”

Monthly giving should be prominently featured on your website and integrated into all fundraising campaigns and communications.

Cultivating a “Netflix-like” subscription mindset is important.

Donors need to see monthly giving as an ongoing subscription to your cause, not a one-time gift. At $8 to $25 a month, it’s an affordable way for donors to make a big impact over time. Segment your donors based on capacity and promote monthly giving to those able to contribute at meaningful levels.

Drive conversions by educating donors on the benefits of monthly giving for both your organization and them. It provides predictable revenue so you can invest in programs. For donors, it’s a convenient, impactful way to support your mission that fits any budget. Provide options for donors to upgrade, change, or cancel at any time to address concerns over long-term commitments.

Identify and engage your most dedicated supporters. Those already giving monthly likely believe deeply in your work. Survey them to better understand their motivations and how to inspire other donors. Ask them to share why they give monthly on your website and social media. Their stories will resonate and spur more conversions.

While launching a monthly giving program requires work, the lifetime value of monthly donors makes the investment worthwhile. Monthly giving fuels nonprofit growth, and organizations cultivating sustainable donor relationships will thrive. With the right strategies, all nonprofits can benefit from this fundraising model. Monthly giving is the future of fundraising, and the future is here.

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Nonprofit organizations often struggle to attract diverse donors and encourage participation from minority groups. However, with intentional outreach and relationship-building, fundraisers can overcome these hurdles.

First, know your donor data. While self-identification means the numbers may not tell the full story, look at the percentages of donors of color in your database. If minorities are underrepresented, make engaging them a priority. However, don’t wait to get perfect data before taking action.

Second, seek out and connect with minority donors. Review your donor lists and portfolios for those who may be of color, then reach out to start a dialogue. Ask open-ended questions to understand their experiences with your organization and how you can better serve them. Be willing to address tough issues around representation and ownership. These conversations build trust and can lead to partnerships.

Third, educate leadership about the opportunity. Explain that donors of color give more on average and want to support causes they believe in. Discuss ways to genuinely and respectfully engage these groups without making them feel singled out. Focus on listening to and collaborating with minority donors.

Fourth, spotlight the impact on those you serve. Discuss how increased fundraising can support underrepresented groups within your mission. This helps all donors understand the value of inclusion and diversity. Ask minority donors for input on how to direct resources to best help their communities.

Finally, recognize and appreciate donors. For minority donors making their first major gift, show abundant gratitude. Share their stories across your organization and invite them into opportunities for deeper involvement. People give to institutions where they feel respected and included, so make donors of color visible and valued.

With work and commitment to building an inclusive culture, nonprofits can strengthen bonds with marginalized groups. But the first step is engaging in open and meaningful dialogue. Listen, learn and build authentic partnerships with donors of color. In the end, breaking down barriers will lead to growth – both in your donor base and in achieving your mission.

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